Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 7, Problem 2P
To determine
To Determine: The explicit or implicit cost in each case.
Concept Introduction:
A direct payment made to others in the course of running a business is called explicit cost. The cost that has already occurred but is not necessarily shown or reported as a separate expense is called implicit cost.
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TOTAL AND MARGINAL PRODUCT
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EEPRODUCTIVITY CALCULATIONS
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structions: Move the slider at the bottom of the diagram to change the quantity of labor hired for both graphs and the table.
) What is the marginal product of the third worker?
) What is the marginal product of the fifth worker?
c) If units of output are sold for $0.80 each, how much revenue does the firm gain by selling the additional units attributed to the 3rd
worker? $
How much revenue does the firm gain by selling the additional output from the fifth worker? $
Quantity of Labor
(workers)
Total Product (units
per hour)
0 12 34 56
0 259 151817
The table above shows the total product schedule for The X Firm. Increasing marginal returns occur until the
worker because
A) 4th; the average product of labor is also increasing
B) 4th; the marginal product of the 4th worker exceeds the 3rd worker, but not the 5th worker
C) 3rd; the average product of labor is also increasing
D) 5th; output declines with the 6th worker
E) 5th; output is maximized
25 - Suppose that the firm's only variable input is labor. When 50 workers are used, the average
product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the
total cost of the fixed input is $500. What is the marginal cost?
a)
$1.06
b)
$3.20
c)
$0.94
138317
d)
$0.63
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